Referrals: Your Untapped Source for Generating Leads

Referrals: Your Untapped Source for Generating Leads

Author: Johanna Rivard / Source: Marketing Insider Group Email, SMS, content, paid ads, and social media are most likely among the first

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Referrals: Your Untapped Source for Generating Leads

Email, SMS, content, paid ads, and social media are most likely among the first things you think about when it comes to lead generation. These are all great tools. However, you should be sure to remember one of the best tools out there: word of mouth or referral marketing. Referrals are potentially the most valuable sources of leads, yet it remains relatively untapped by most businesses.

According to a study conducted by Heinz Marketing, companies with formal referral programs reported nearly 40% of their leads coming from referrals. In comparison, companies without referral programs attributed a mere 22% of their leads to referrals, relying more on expensive outbound strategies like cold calling to fill their pipelines.

Think about it. How many times have you tried a new restaurant or purchased a product after a recommendation by a friend? I’m guessing at least a few times. Then, if you liked it, you probably shared your experience with another person. That person then recommended the same restaurant or product to somebody else. The referral becomes even more effective if the buying experience and product value are exceptionally good. If you felt strongly about something, you’d spread the word, right?

The Trust Factor

We listen to people we trust. We know that if someone we trust recommends a brand or product, it’s typically going to be as good as they say it is. Come to think of it, the person who tells you about a certain product or service must know you pretty well, so they know what you like and don’t like. That’s reason enough to trust their recommendation and heed their advice.

Exact Targeting

The great thing about the referral system is that customers don’t refer products to the wrong audience. People know their friends…

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